media releases

VANCOUVER, British Columbia--(BUSINESS WIRE)--Jun. 12, 2014--
lululemon athletica inc. (NASDAQ:LULU) today announced financial results
for the first quarter ended May 4, 2014 and that its board of directors
has approved a stock repurchase program to buy back up to $450 million
of its common shares in the open market at prevailing market prices. The
timing and actual number of common shares to be repurchased will depend
upon market conditions and other factors, in accordance with Securities
and Exchange Commission requirements.

The share buyback program is intended to create shareholder value by
making opportunistic repurchases during periods of favorable market
conditions and is expected to be completed in two years. Shares may be
repurchased from time to time on the open market, through block trades
or otherwise. Purchases may be started or stopped at any time without
prior notice depending on market conditions and other factors.

For the first quarter ended May 4, 2014:

Net revenue for the quarter increased 11% to $384.6 million from
$345.8 million in the first quarter of fiscal 2013.

Total comparable sales on a combined basis increased 1% for the first
quarter on a constant dollar basis. Comparable corporate-store sales
for the first quarter decreased by 4% on a constant dollar basis and
direct to consumer revenue increased 25% on a constant dollar basis.

Direct to consumer revenue increased to $66.0 million, or 17.2% of
total Company revenues, in the first quarter of fiscal 2014, an
increase from 15.6% of total Company revenues in the first quarter of
fiscal 2013.

Gross profit for the quarter increased 15% to $195.7 million, and as a
percentage of net revenue gross profit increased to 50.9% for the
quarter from 49.4% in the first quarter of fiscal 2013. Gross profit
for the first quarter of fiscal 2013 included a provision of $17.5
million related to the pull-back of black Luon pants.

Income from operations for the quarter increased 6% to $69.8 million,
and as a percentage of net revenue was 18.2% compared to 19.1% of net
revenue in the first quarter of fiscal 2013.

Tax expense for the quarter was $52.5 million, which included a
one-time adjustment of $30.9 million for the planned repatriation of
foreign earnings that will be used to fund the share buyback program.
The normalized tax rate before the $30.9 million non-recurring
adjustment would have been 30.1%, compared to 29.8% a year ago. The
tax rate for the first quarter of fiscal 2014, including the one-time
adjustment, was 73.4%.

Excluding the one-time adjustment, diluted earnings per share were
$0.34 in the first quarter of fiscal 2014. Including the non-recurring
adjustment, diluted earnings per share for the quarter were $0.13,
which included a $0.21 per share impact from the planned repatriation
of foreign earnings.

The Company ended the first quarter of fiscal 2014 with $752.0 million
in cash and cash equivalents compared to $588.4 million at the end of
the first quarter of fiscal 2013. Inventory at the end of the first
quarter of fiscal 2014 totaled $177.4 million compared to $143.7 million
at the end of the first quarter of fiscal 2013. The Company ended the
quarter with 263 stores.

Laurent Potdevin, lululemon’s CEO, stated: "We are pleased that Q1
results were slightly ahead of our expectations. 2014 is very much a
transitional year for lululemon, and we are on track with the
improvements we have set out to achieve. We are focused on building a
scalable foundation to further elevate our North American business
and pursue the brand's incredible international potential." Mr. Potdevin
continued: "Despite a reduced outlook, I am confident that the work we
are doing today will only enhance our premium positioning as we continue
to lead as the market innovator."

Updated Outlook

For the second quarter of fiscal 2014, we expect net revenue to be in
the range of $375 million to $380 million based on a total combined
comparable sales decrease in the low to mid single digits on a
constant-dollar basis. Diluted earnings per share are expected to be in
the range of $0.28 to $0.30 for the quarter. This guidance assumes
146.0 million diluted weighted-average shares outstanding and a 30.2%
tax rate. The guidance does not reflect the potential repurchase of
shares.

For the full fiscal 2014, we now expect net revenue to be in the range
of $1.770 billion to $1.800 billion based on a total combined comparable
sales increase in the low single digits on a constant-dollar basis.
Diluted earnings per share are expected to be in the range of $1.50 to
$1.55 for the full year, or $1.71 to $1.76 normalized for the one-time
tax adjustment related to the planned repatriation. This guidance
assumes 146.3 million diluted weighted-average shares outstanding and a
38.6% tax rate, which includes the tax adjustment for the planned
repatriation, or 30.2% before the tax adjustment. The guidance does not
reflect the potential repurchase of shares.

Conference Call Information

A conference call to discuss first quarter results is scheduled for
today, June 12, 2014, at 9:00 a.m. EDT. Those interested in
participating in the call are invited to dial 1-877-303-3203
approximately 10 minutes prior to the start of the call. The conference
call will also be webcast live at www.lululemon.com.
The webcast will be accessible on our website for approximately 30 days
after the call.

About lululemon athletica inc.

lululemon athletica (NASDAQ:LULU) is a yoga-inspired athletic apparel
company that creates components for people to live long, healthy and fun
lives. By producing products that help keep people active and stress
free, lululemon believes that the world will be a better place. Setting
the bar in technical fabrics and functional designs, lululemon works
with yogis and athletes in local communities for continuous research and
product feedback. For more information, visit www.lululemon.com.

Non-GAAP Financial Measure

Constant-dollar net revenue changes, which exclude the impact of changes
in foreign exchange rates, is not a United States Generally Accepted
Accounting Principle (“GAAP”) performance measure. We provide
constant-dollar net revenue changes because we use the measure to
understand the underlying growth rate of revenue excluding the impact on
a quarter-by-quarter basis of changes in foreign exchange rates, which
are not under management’s direct control. We believe that disclosing
net revenue changes on a constant-dollar basis is useful to investors
because it enables them to better understand the level of growth of our
business.

The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP.
For more information on this non-GAAP financial measure, please see the
table captioned “Reconciliation of Non-GAAP Financial Measure – Constant
dollar changes” included in the accompanying financial tables, which
includes more detail on the GAAP financial measure that is most directly
comparable to non-GAAP financial measures and the related
reconciliations between these financial measures.

Forward-Looking Statements:

This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 that involve risks, uncertainties
and assumptions, such as statements regarding our future financial
condition or results of operations and our prospects and strategies for
future growth. In many cases, you can identify forward-looking
statements by terms such as "may," "will," "should," "expects," "plans,"
"anticipates," "outlook," "believes," "intends," "estimates,"
"predicts," "potential" or the negative of these terms or other
comparable terminology. These forward-looking statements are based on
management’s current expectations but they involve a number of risks and
uncertainties. Actual results and the timing of events could differ
materially from those anticipated in the forward-looking statements as a
result of risks and uncertainties, which include, without limitation:
our ability to maintain the value and reputation of our brand, including
any negative publicity regarding our products or the production methods
of our suppliers or manufacturers; the acceptability of our products to
our guests, including receiving products that comply with our technical
specifications and quality standards; our reliance on and limited
control over third-party suppliers to provide fabrics for and to produce
our products; an economic downturn or economic uncertainty in our key
markets; our exposure to various types of litigation; increasing product
costs and decreasing selling prices; our ability to anticipate consumer
preferences and successfully develop and introduce new, innovative and
updated products; our ability to accurately forecast customer demand for
our products; any unforeseen disruption of our information systems; any
material disruption of our information systems; our ability to manage
our growth and the increased complexity of our business effectively; the
fluctuating costs of raw materials; our ability to expand
internationally in light of our limited operating experience and limited
brand recognition in new international markets; our highly competitive
market and increasing competition; our ability to deliver our products
to the market and to meet customer expectations if we have problems with
our distribution system; our ability to protect our intellectual
property rights; our ability to cancel store leases if an existing or
new store is not profitable; increasing labor costs and other factors
associated with the production of our products in China; our ability to
successfully open new store locations in a timely manner; our ability to
comply with trade and other regulations; the continued service of our
senior management; seasonality; fluctuations in foreign currency
exchange rates; the operations of many of our suppliers are subject to
international and other risks; our ability to source our merchandise
profitably or at all; and other risks and uncertainties set out in
filings made from time to time with the United States Securities and
Exchange Commission and available at www.sec.gov,
including, without limitation, our most recent reports on Form 10-K and
Form 10-Q. You are urged to consider these factors carefully in
evaluating the forward-looking statements contained herein and are
cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by these cautionary
statements. The forward-looking statements made herein speak only as of
the date of this press release and we undertake no obligation to
publicly update such forward-looking statements to reflect subsequent
events or circumstances, except as may be required by law.

lululemon athletica inc.

Condensed Consolidated Statements of Operations

Expressed in thousands, except per share amounts

Thirteen Weeks Ended

Thirteen Weeks Ended

May 4, 2014

May 5, 2013

(unaudited)

(unaudited)

Net revenue

$

384,618

$

345,782

Costs of goods sold

188,874

175,057

Gross profit

195,744

170,725

As a percent of net revenue

50.9

%

49.4

%

Selling, general and administrative expenses

125,943

104,836

As a percent of net revenue

32.7

%

30.3

%

Income from operations

69,801

65,889

As a percent of net revenue

18.2

%

19.1

%

Other income (expense), net

1,643

1,501

Income before provision for income taxes

71,444

67,390

Provision for income taxes

52,463

20,111

Net income

$

18,981

$

47,279

Basic earnings per share

$

0.13

$

0.33

Diluted earnings per share

$

0.13

$

0.32

Basic weighted-average shares outstanding

145,383

144,482

Diluted weighted-average shares outstanding

145,861

145,849

lululemon athletica inc.

Condensed Consolidated Balance Sheets

Expressed in thousands

May 4, 2014

February 2, 2014

(unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

751,965

$

698,649

Inventories

177,375

186,090

Other current assets

52,043

58,100

Total current assets

981,383

942,839

Property and equipment, net

271,370

255,603

Goodwill and intangible assets, net

28,107

28,201

Deferred income taxes and other non-current assets

10,097

23,045

Total assets

$

1,290,957

$

1,249,688

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable

$

6,960

$

12,647

Other current liabilities

97,990

100,098

Income taxes payable

533

769

Total current liabilities

105,483

113,514

Non-current liabilities

57,093

39,492

Stockholders’ equity

1,128,381

1,096,682

Total liabilities and stockholders’ equity

$

1,290,957

$

1,249,688

lululemon athletica inc.

Condensed Consolidated Statements of Cash Flows

Expressed in thousands

Thirteen Weeks Ended May 4, 2014

Thirteen Weeks Ended May 5, 2013

(unaudited)

(unaudited)

Cash flows from operating activities

Net income

$

18,981

$

47,279

Items not affecting cash

43,649

32,888

Other, including net changes in other non-cash balances

8,345

(55,032

)

Net cash provided by operating activities

70,975

25,135

Net cash used in investing activities

(25,447

)

(20,976

)

Net cash used in financing activities

(1,649

)

(4,358

)

Effect of exchange rate changes on cash

9,437

(1,562

)

Increase in cash and cash equivalents

53,316

(1,761

)

Cash and cash equivalents, beginning of period

$

698,649

$

590,179

Cash and cash equivalents, end of period

$

751,965

$

588,418

lululemon athletica inc.

Reconciliation of Non-GAAP Financial Measure

Constant-dollar changes in total comparable sales

(unaudited)

Thirteen Weeks Ended

Thirteen Weeks Ended

May 4, 2014

May 5, 2013

% Change

Total comparable sales (GAAP)1

(2)%

11%

Adjustments due to foreign exchange rate changes

3%

1%

Total comparable sales in constant dollars1

1%

12%

1 Total comparable sales includes comparable corporate-store
sales and direct to consumer sales.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding lululemon athletica inc (PR)'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.